The tax estimate, in bands, from your own records

The app shows what to keep back for tax, worked out from what you were paid and what you spent since 6 April. It is an estimate from your records, not advice. It uses income tax in bands, Class 4 National Insurance, and any CIS already taken off you.

Your accountant knows what the app does not. An estimate from your records, not advice.

What it does

The tax page holds one estimate for this tax year, from 6 April to 5 April. It shows what you made, the bill so far split into income tax and National Insurance, what has already been taken off you, what is left to pay, and what that means for the full year.

The income tax is worked out in bands. Your other income for the year fills the lower bands first, so your profit is the slice on top. Class 4 National Insurance is worked out on your profit. Any CIS already taken off you is a credit against the bill, so it can leave a refund and it can never leave a negative bill.

Then the page says what that means for the full year. It projects the year on the part gone, and it names a monthly figure to put aside. That monthly figure is the projection less CIS already paid, divided by the months left in the tax year, not by twelve.

Who it is for

It is for the sole trader who wants a plain number to keep back, without keeping a separate tax sheet.

One person and one phone, on cash basis. Money in is money received, not invoices raised. Money out is money paid. A draft bill that has not been paid is not money in, so it does not move the estimate.

It is not a bill and it does not file anything with HMRC. It is an estimate from your records, not advice.

How it works

1. The app counts this tax year. It adds payments received since 6 April, net of VAT when you are VAT registered, and costs paid in the same window, net of reclaimable VAT. The difference is your profit so far.
2. You can add other income for the year, such as a PAYE job, a pension or rent, in one box. That figure is a full year figure. It fills the bands first and changes which band your profit lands in, and nothing else.
3. The app works out income tax on profit plus other income in bands, then takes off the income tax on other income alone. What is left is the income tax on your profit. It works out Class 4 National Insurance on your profit. The bill so far is those two added.
4. It takes off any CIS already taken off you this year where you are a subcontractor and you have deductions. That is money already paid to HMRC, so it comes off the bill. If it beats the bill, the rest is coming back to you.
5. For the full year, it scales profit by the part of the year gone and runs the same rates over it. With less than four weeks of trading it says there is not enough of the year gone to project yet, rather than printing a confident number.
6. When the bill is £1,000 or more, the page shows two payments on account, each half the bill, due 31 January and 31 July. Under £1,000 there is no payment on account.

Every figure the ring, this page and the assistant's tax answer show is the same estimate. One function works it out and three places read it.

How the working is shown

The page shows every number it used, so a trader can check it:

• Personal Allowance of £12,570 from gov.uk. It tapers by £1 for every £2 of income over £100,000 and is nil at £125,140. Read 2026-10-18 on gov.uk.
• Income tax bands for 2026/27 of 20 percent on the first £37,700 of taxable income, 40 percent on the next £87,440, then 45 percent above. Read 2026-10-18 on gov.uk.
• Class 4 National Insurance for 2026/27 of 6 percent on profits over £12,570 to £50,270 and 2 percent above. Class 2 is treated as paid at profits of £7,105 or more, so it is not added. Read 2026-10-18 on gov.uk.
• Payments on account start when the bill was £1,000 or more. Each is half the bill. Read 2026-10-18 on gov.uk.

These rates are for England and Wales and Northern Ireland. Scotland has its own bands.

Not in the estimate, and the page says so: the £1,000 trading allowance, capital allowances, student loan repayments, the marriage allowance, pension relief, savings and dividends. Under cash basis most equipment is already an ordinary cost, which is the app's rule for costs.

What it does not do

• It does not file a return with HMRC. It keeps your records and works out totals. Filing is done through HMRC, not from this app.
• It does not give tax advice. It shows figures from your own payments and costs. Your accountant decides what you owe. The page says An estimate from your records, not advice.
• It does not claim VAT before you have been paid it, or reclaim VAT on a cost before you have paid it. Money in is payments received. Money out is costs paid. That is the cash basis the tax page and the reports share.
• It does not guess CIS. CIS is only taken off where you are a subcontractor and you have deductions on your invoices. The app reads those deductions from your own bills, it does not ask for them.
• It does not write a projection with less than four weeks of trading. It says there is not enough of the year gone yet.
• It does not split Class 2 National Insurance out as a bill. At profits of £7,105 or more it is treated as paid. That is why the bill is income tax plus Class 4 alone.

Questions

Is this what I owe HMRC?

No. It is an estimate from your records of what you might owe, worked out from what you were paid and what you spent so far. Your accountant knows what the app does not, so the page says An estimate from your records, not advice.

Why does other income change my estimate?

Because income tax is worked out in bands on your whole income. Your other income fills the lower bands first, so your profit lands higher up. The app shows the tax on profit plus other income, less the tax on other income alone, so you see the tax your trade caused.

What does CIS already taken off mean?

When you work as a subcontractor in Construction Industry Scheme work, the contractor takes 20 percent off the labour where you are verified, 30 percent where you are not, and nil where you are gross. That money is already paid to HMRC. The app reads those deductions from your invoices and takes them off the bill. If they beat the bill, the rest is coming back to you.

What are payments on account?

Two payments for next year's bill, each half of what you owed last year, due 31 January and 31 July. They are due when the bill was £1,000 or more. Under £1,000 they are not needed. Read 2026-10-18 on gov.uk.

Why is the monthly figure not my bill divided by twelve?

Because the tax year is 6 April to 5 April, not January to December. The monthly figure is the projected amount left to pay, divided by the months left in this tax year. That is the amount to put aside a month from now. A straight twelfth would be too low in April and too high in February.

Why does the page say not enough of the year gone?

When less than four weeks have passed since 6 April, a straight line to a full year would be a guess dressed as a number. The page says so instead. After four weeks it shows the projection and the monthly figure.

Does VAT change the estimate?

Money in and money out are both taken net of VAT when you are VAT registered, so VAT taken out before the profit figure does not affect the tax kept back. When you are not registered, the figures include any VAT you paid, because that VAT is a real cost to you.

Related

• Reports: the year, what you are owed, and the tax and VAT section with the ring and the bar.
• Costs and receipts: the spend the estimate reads.
• Invoices: the bills whose deductions are read for CIS.
• Every part of the app: the other pages.

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